My Worst Investment Ever Podcast
Business:Investing
BIO: Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation.
STORY: Vincent decided to overleverage an ETF during the financial crisis of 2008 in the belief that the economy would bounce back. Interest rates, however, fell, and he lost 70% of his investment.
LEARNING: Take into account falling yields and falling inflation. Understand the difference between a trade and an investment.
“The more volatile something is, the more likely it will lose its value over time.”Vincent Deluard
Guest profile
Vincent Deluard is the global macro strategist for StoneX Group Inc., where he authors weekly commentary on global macro topics and advises pension funds on asset allocation. Prior to joining StoneX Group Inc., Vincent served as Europe strategist for Ned Davis Research, where he created the firm’s Europe product. Before that, Vincent was executive vice president for TrimTabs Investment, where he headed the firm’s quantitative research. Vincent is frequently quoted in the Financial Times, the Wall Street Journal, and Barron’s and is regularly on Bloomberg TV and CNBC.
Worst investment everDuring the great financial crisis of 2008, Vincent had just started working and decided to get into investing. The interest rates at the time were stable at 5%—which seemed like a good number to Vincent.
Then in a matter of a week, the interest rates went all the way to 2.5% in the wake of the Lehman Brothers panic. As the interest rates went down, bond prices went up. Vincent believed the situation would reverse, so he leveraged an ETF that gave him access to shorting the US Treasury prices. This worked at the beginning.
The economy came out of recession, the yield curve steeped, and interest rates increased. Vincent thought they would go higher and back up to the 5% range, so he didn’t sell his position. Unfortunately, the interest rates didn’t go back up, and Vincent lost about 70% of his investment.
Lessons learnedMake your mistakes when you’re young, and learn from them to become a prudent investor.
Vincent’s recommendationsVincent recommends signing up for his weekly reports, in which he addresses risks that people may have missed and other overlooked things. Sign up on his pinned tweet to get a two-month free trial.
No.1 goal for the next 12 monthsVincent’s number one goal for the next 12 months is to do what matters to him and live a more meaningful life.
Parting words“This was fun, and I like your humility. I think we all need some of that.”Vincent Deluard
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Connect with Vincent Deluard
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August Biniaz - Be a Specialist Not a Jack of All Trades
William Browder - Don’t Go to Russia
ISMS 41: Larry Swedroe – Focus on Managing Risk Not Returns
Chris Ball - If They’re Not 100% Right, Don’t Hire Them
Vivek Raina - Nobody Can Beat You at What You’re Good At
William Cohan - Power Failure: The Rise and Fall of An American Icon
Tony Fish - Be Brave to Ask the Unsaid Questions
ISMS 40: Larry Swedroe – Market vs. Hedge Fund Managers’ Efficiency
Chris Kendall - Don’t Underestimate the Funding Needed to Go Big Time
Riggs Eckelberry - Don’t Go into Any Industry Unprepared
ISMS 39: Larry Swedroe – Don’t Choose a Fund by Its Descriptive Name
Lark Davis - Take Your Profits and Run Away
Sam Primm - Be Intentional About What You Invest In
Marc Faber - The Value of True Diversification
Coach JV - Diversify Inside and Outside the Asset Class
ISMS 38: Larry Swedroe – The Self-healing Mechanism of Risk Assets
Solomon Thimothy - Give Yourself Permission to Fail
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